Mr. Wufu Chen, Chairman of Acorn Campus Taiwan pointed out that, facing a new wave of lifestyle paradigm shift, he and his company will assist Taiwan in forming an international team with globalized visions and help Taiwanese startups connect with international talents, markets, and capital. On top of technological skills, members of the international team should also possess international vision and perspective. They must be able to define their market and customers, and engage in dialogs with the international market, thereby establishing a footing for the new economy and industry developments in Taiwan.
For the past few years, enterprises not only face challenges in operating growth and diversified management, they also need to deal with operating pressure arising from digital transformation as the global economy embarks on a new phase of paradigm shift. In the past, Taiwanese enterprises often sought to deal with such problems through internal innovation and solve business problems accordingly. Nevertheless, more and more enterprises have begun to look for external innovative collaborations and establish new business models. This is why corporate venture capital (CVC) has become one of the solutions for enterprises.
Mr. Chen pointed out that there is a chance for CVC to make up for the inadequacy of VC in Taiwan. In particular, in terms of all next-generation products and services, the value of physical products and hardware is gradually decreasing, while the value of services generated from software and applications, including artificial intelligence (AI) and software-as-a-service (SaaS) solutions, is rapidly increasing. This implies that enterprises need to accelerate their investments in digital transformation. For Taiwanese enterprises whose business mindset is largely focusing on OEM and ODM, partnering with startups to acquire service contents, flexible responses, and an understanding of the digital generation can help accelerate the progress of digital management for these enterprises.
Mr. Chen emphasized that Taiwan has competent local entrepreneurs (who focus on providing "little joys"), as well as national entrepreneurs (whose goal is to go public in Taiwan). Whereas, the target of the international team is clear—to help Taiwanese startups venture into the global market. Therefore, international resources should also be proactively deployed for the management of the entire ecosystem. Mr. Chen suggested that the "Silicon Valley model" could be utilized to source international funding on a project basis. In addition, the concept of "marketing" needs to be reinforced in Taiwan to make industry more sensitive to developments of the global market.
Mr. Chen pointed out that internationally, several important paradigm shifts have since occurred in the information and communications technology (ICT) industry and industry in general after 2000. The first of which was a paradigm shift in networking technology driven by networking hardware companies including 3COM and Cisco in 2000. This particular paradigm shift also underpins the development of global networking.
As the networking structure becomes increasingly complete, a paradigm shift in business models, driven by Google, Facebook, YouTube, and Amazon, took place subsequently. In this stage, it enabled everyone around the world to completely connect their work and life to the Internet and provided impetus for a new type of lifestyle. Therefore, the development underscores the fact that a product must be able to bring interactions and experiences to its users.
The next big thing will be the paradigm shift in lifestyle, driven by the metaverse, etc. This phase has only just begun and opportunities are plenty. However, an entrepreneurial team needs to be able to understand the market demand in addition to possessing the required technological competencies. In particular, sensibility-driven value will immensely exceed rationality-driven value.
Mr. Chen pointed out that while developing the new economy, "Technology is global, but service is local." Although Taiwanese startups are technologically competent, technologies are only tools after all. Producing the same product by using the same technology in a different market such as the U.S., will yield results that are different from the Taiwan market. Therefore, while developing an international market, a team needs to acquire insights into the local market's needs and provide products that cater to such needs.
Since rapidly changing and unstable global developments have led the capital market to believe in an impending recession, Mr. Chen believes that there may be a tightening in the capital supply, making it even more imperative for startups to control and manage their cash flows. In particular, it would be best for startups that have just acquired funding to put their plans on hold. He also recommends startups to reposition their products since the current economy has made the end-user customers less willing to invest. Startups could use this time to adjust their product structure and focus on how their products could reduce customers' input costs and maximize their profits. For instance, subscription to SaaS services, which has gained popularity recently, is an opportunity that is hard to pass up.
At this day and age, no one is positioning themselves as an AI company anymore! Mr. Chen is very candid on this topic. Nowadays, every single entrepreneur has AI. The key is not simply having it, but what you are doing with it. As he mentioned at the beginning of this article, the greatest core value to any entrepreneurial effort lies in "what you are doing," i.e., every entrepreneur should think about what they are doing, and what they wish to achieve. By contemplating these two questions, they may be able to find answers that are completely unexpected.
Readers can download " 2022 Taiwan Startup Ecosystem Survey" jointly conducted by PwC Taiwan, TIER and DIGITIMES: https://www.pwc.tw/en/publications/taiwan-startup-ecosystem-survey.html